Court Upholds End-User License Agreements

The US Court of Appeals for the Ninth Circuit recently ruled that End-User License Agreements (EULAs) are absolutely binding, thereby making resale, redistribution, modifications and any other terms forbidden within the agreement illegal.

The court's decision came from an appeal to the case Vernor v. Autodesk, in which Timothy Vernor sued Autodesk for repeatedly trying to shutdown his eBay business where he sold used software including AutoCAD, a program developed by Autodesk. In 2008 a federal court ruled Vernor's resale legal, but now an appeal has overturned that ruling, stating that an end-user is subject to the terms of an EULA, even if dictates that the user does not, in fact own the software, but is instead a licensee.

"We hold today that a software user is a licensee rather than an owner of a copy where the copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use restrictions," the ruling said.

If an end-user licenses a product, they don't technically own said product and therefore are not allowed to resell it, rent it, modify it, and so forth.

The ramifications of this ruling are quite far-reaching in the digital media realm, as music services, movie purchases, and editing tools all contain EULAs that can restrict distribution rights and ownership.

The only entity that can change the amount of control software companies and their EULAs have over end-users is Congress.

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Comments

Slavery

Poltiser

If I cannot resell what I bought without being informed fully about this condition prior to transaction it is extortion with conman counting on my ignorance, lack of time and legal knowledge...
... and if it is supported but legal system - shame on you! I thought slavery is illegal.

An issue of ownership

Trevan McGee

What troubles me about the ruling is that often times when consumers buy software there is little or no indication that they are in fact buying a license. It's difficult to find validity in a license agreement that requires me to buy the product first, then agree to the license after I've taken it home and am preparing to install it. If the courts are going to uphold this ruling, I think it needs to be made clear to consumers that they are buying a license and not the software itself. Perhaps license-based software should come with a warning similar to the one found on a pack of cigarettes.

It will also be interesting to see whether or not additional companies adopt similar EULAs in the wake of this ruling. For awhile now video game companies have been dissatisfied with the used gaming market shouldered by franchises like Gamestop and soon Best Buy and Target for gouging consumers and reselling software and hardware. Simply put resold hardware does not contribute to a company's bottom line, but if these companies implement a similar EULA, they could forbid gamers from reselling purchased games.

Court Upholds End-User License Agreements

Somebody

If I am not provided the details of the EULA prior to the purchasing of the product, how can I be deemed to have purchased the software under the condition set out in the EULA? When I am shown the EULA and forced to agree to its terms, to use the software I purchased lawfully, is this not fraudulent conduct and am I not being extorted?

Free Market vs Indentured Commercialization

mw98

Consumers are getting a raw deal when purchasing software, media, .... cars, houses, and in-general anything with a license agreement designed Not-To-Be-Read by average folk. Slowly but surely we are signing our freedoms and liberties away, one agreement at a time.

Spread the word that there is a difference between a Free Marketplace and Indentured Commercialization.

Back in the day most of our money went to purchase items from real marketplaces, Mom and Pop Stores, and buy what you get principles at work. Nowadays the clever calculus of advantage and exploitation divided by the risks of the general public getting overtly agitated enough to legislate control over the indenturetude of buyers, gets calculated into a formula for how to get the most out of others without them realizing it, and more-so than just money.

We're talking about little bits and pieces of the American Way getting eaten up without our notice. it's like a cancer. In fact, I believe the biggest threat to our Freedom and Liberty in the Future won't come from Neo-Nazis or Neo-Communists, but rather the slow erosion of what we already take for granted.. with Iron Curtain Software and Indentured Commercialization everywhere.

A not-so-free Free "Marketplace" is festering deeper and deeper into the body cavity of Free Enterprise. But if you look closely you can see the light, and its getting brighter and brighter every day. Switch to FOSS soon, or else.

Light at the end of the tunnel

Anonymous Coward

This for me means something good - if the EULA is absolutely binding, then that means any PC that has Windows (any version) preinstalled, I as an end-user choose not to agree to the EULA and have just the software, not the entire PC, returned for a refund. Goodbye Mickeysoft Tax!

EULA headaches

Nobody Important

This is the main issue I have with the software world. I hate being a licensed user, I want to be an owner of my copy. If I cannot sell it later, then I do not buy it. Linux has greatly eased my woes. even purchased digital music is a single owner conundrum. I only buy Music CDs since I can sell those later if I wish.